Can the Palestinian Tech-Industry Catch Up to Its Neighbors?

The Palestinian hi-tech industry is not prepared to realize the benefits of the technology boom in the Arab world, writes Danny Rubinstein, unlike, for example, the Jordanians, who created Maktoob, the biggest portal in the Arab world, then sold it to Yahoo!

REUTERS/Mario Anzuoni

The Yahoo! offices

The name of the Arab portal “Maktoob” is well-known in Palestinian high-tech centers in Ramallah. Two Jordanian entrepreneurs, both from families of Palestinian origin, sold Maktoob two years ago to search engine giant Yahoo for $150 million. Maktoob is the biggest portal in the Arab world. It sees some 17 million surfers every month, and it includes news, computerized services, telecommunications and various technologies. In Ramallah, some compare the major consequences of the deal with those effected by the Mirabilis [the Israeli company that developed the ICQ instant messaging program, a pioneer of online chatting that revolutionized communication over the Internet] and Check Point [a global provider of IT security solutions, best known for its firewall and VPN products] deals in 1990s. Many believe there is a link between this success story and the attraction of young Palestinians to computer studies.

Arab Surfers has Doubled in Two Years

The Maktoob deal constitutes the only serious exit in the Arab high-tech world, but the field’s potential for development is enormous. The number of internet users in the Arab world is growing at a dizzying rate. A senior figure in the Palestinian high-tech industry estimates that out of a population of more than 300 million people in the Arab world, some 35 million were surfing the net in 2009. In 2010, when the Maktoob deal was signed, that number reached 70 million, and today it stands at roughly 140 million. The percentage among Palestinians is especially high, in part due to limitations on movement. In the last several months, it emerged that Arab politicians in Israel, Palestinian leaders Salam Fayyad and Jibril Rajoub , and Palestinian President Mahmoud Abbas’ bureau all have Facebook accounts.

This same source says that while there is a website in the western world for every 10 computer users, in Arab countries, there is one website for every 280 users. That means that Arabs would need to build six million more sites in order to reach Western levels. When it comes to content, advertising and marketing, there remains — for the moment — a large gap.

Technology Industry Investors in Jordan

The Jordanian government has recognized this enormous potential, and is attempting to further the technology industry. Jordan is investing in the development of human capital and establishing many development centers. It is no coincidence that Abraaj, the large investment firm from Dubai that tends to invest in high tech, held an important conference a few weeks ago in Amman.

The Palestinian hi-tech industry, on the other hand, is having a hard time breaking into the global market, and it might miss the opportunity provided by technological growth in the Arab world. The 2,000 young Palestinians who complete their studies each year don’t have much of a chance at finding work in the West Bank or Gaza. Some find work in software companies in Ramallah, others travel to Jordan, the Gulf states or overseas — but many remain unemployed.